McTier, Brian C.; Wald, John K. - In: Journal of Corporate Finance 17 (2011) 3, pp. 649-665
We examine the impact of securities class action lawsuits on firms' investment and financing choices. Firms which overinvest are more likely to be sued. After a lawsuit, firms on average decrease overinvestment activity, and they decrease payouts while increasing leverage, cash holdings, and...